California Snapshot 

NATURAL HAIR MUST BE ALLOWED.  A new California statute says natural hair styles must be allowed. So take a squint at your dress and grooming policies, and see what they say. 

NO INDEPENDENT CONTRACTORS (ALMOST). The Dynamex decision basically put the kibosh on using individuals as independent contractors in anything remotely related to the underlying business for wage-hour purposes. A new proposed law, AB 5, would codify this across the board in California.  

SOME GOOD NEWS: NON-SLIP SHOES CAN BE REQUIRED. A new case says non-slip shoes are required in so many places, it isn’t really a business expense for an employee, so no need to reimburse. 

MORE GOOD NEWS: CONTINUING EMPLOYMENT CAN BIND AT WILL EMPLOYEES TO NEW ARBITRATION PROGRAM. A new case, Diaz v Sohnen, says an employer can require an “at will employee” to be bound by a new dispute resolution program by remaining employed after being told that the program was a mandatory condition of employment. It’s still worthwhile for employers to be prepared to show that they gave employees adequate notice and that the program is generally fair.  

SEXUAL HARASSMENT AND #METOO. Every employer with more than five employees must provide sexual harassment training for supervisors and non-supervisors before January 1, 2020, if the company did not do it last year for both supervisors and non-supervisors. So some of you have about five months to get this in the schedule.  

There is no confidentiality allowed in settlements for cases alleging sexual harassment. When settling a case that does not involve sexual harassment, be sure to include in your agreement confidentiality language, plus an express acknowledgement that the individual has made no sexual harassment claims or allegations.

DE MINIMIS TIME "CALLING IN" IS COMPENSABLE, AND ROUNDING IS A PROBLEM.  A new case, Ward v. Tilly's, Inc. -- says reporting time (usually two hours) is owed if you require employees merely to call in to see whether they are scheduled for a work shift. Also, increasingly any rounding systems or other system that does not “pay to the punch” for non-exempts has come under attack by the plaintiffs’ bar. We have recommended that employers eliminate rounding and review their “call-in” programs.   

SOME LEGAL TRENDS

The plaintiffs’ class action and PAGA bar have been their usual creative selves with various new and old theories of liability. 

1. We have seen an uptick in cell phone reimbursement class actions (the Schwan’s case), and various theories alleging that de minimis time for both pre- and post-shift work should be paid under Troester v Starbucks. 

2. Inaccurate pay stub claims are still rampant. We have gone to reviewing a few examples of them for clients every quarter free of charge. 

3. Rest break issues under Augustus v ABM continue to be problematic. It is critical that companies be able to prove their people were not on call during their 10-minute rest breaks.  

4. Another niche issue for the plaintiffs’ bar involves employers’ failure to include bonuses in calculating the regular rate of pay for overtime purposes. Plaintiffs are using the same theory to say that when employers pay a meal period premium, it must reflect this higher regular rate. This is worth checking (and worth doing), although technically there is no definitive law either way.  

5. We have seen an uptick in Fair Credit Reporting Act cases, and many allege that the document is not a “standalone,” which is required under the Act.  

Still, the best medicine is compliant written policies and an arbitration agreement with a class waiver that leaves PAGA-only cases for the plaintiffs’ bar. Although PAGA cases are tough to deal with, they are far better than class actions with a four-year statute of limitations.  

I have a few ideas about preventing the PAGA part, but we expect a new decision from the California Supreme Court in a case called Lawson, which will give us some guidance.